Las Vegas-based electronic slot- and bingo-machine maker PlayAGS posted record revenue for its fourth quarter, although higher interest expenses and an unfavorable income-tax expense dampened net earnings.
In a statement, the company said its net income was $67,000, or breakeven per share, for the three months ended Dec. 31, down from year-earlier net income of $2.5 million, or 6 cents per share.
The latest earnings per share missed the 5-cent-per-share consensus forecast of analysts polled by Seeing Alpha. The company said an unfavorable $2 million tax swing more than offset a nearly 20% year-over-year increase in income from operations.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 14.7% year-over-year to a record $42.8 million from $37.3 million.
Fourth-quarter revenue rose 15.3% to $94.2 million from $81.7 million and topped Seeking Alpha-polled analysts’ $92.3 million forecast. The company has scored record quarterly revenue in four of the past five quarters.
Quarterly revenue increased by double-digit percentages in all three of PlayAGS’s business segments — electronic game machines (up 14.1%), table products (24.1%), and interactive (34.4%).
“The quality and consistency of our recent financial performance are true reflections of our incredibly talented and focused team, increasingly deep and diverse product offering across all three segments, and the improving efficiency and effectiveness of our execution,” PlayAGS Chief Executive Officer David Lopez said in a statement.
Chief Financial Officer Kimo Akiona said PlayAGS ended 2023 with a total net debt-leverage ratio of 3.2 times, down from 3.8 times when the year started. He said the company has its eye on lowering the ratio below 3.0 times and will use efficient working-capital management, disciplined capital expenditure deployment, and expected cash interest savings from a recent debt repricing and repayment to accomplish the goal.
On Feb. 5, PlayAGS said it repriced its term-loan credit facility, removing the credit-spread adjustment related to term-loan borrowings and reducing the interest rate applied to such borrowings to the secured overnight financing rate plus 3.75%.
The company also elected to repay $15 million of its total outstanding debt. Given the current secured overnight financing rate, the company estimated the repricing and repayment will yield more than $3 million in annualized cash interest-expense savings.
Global electronic game machine sales topped 1,500 units for the first time, increasing about 36% year over year, PlayAGS said. Global electronic game machine unit sales growth has topped 30% in each of the past three quarters.
The company’s domestic electronic game machine installed base expanded to 16,443 units at the end of the fourth quarter, up 117 units year on year.
For the 12 months ended Dec. 31, PlayAGS had $428,000, or 1 cent per share, in net income, reversing a loss of $8 million, or 22 cents per share, a year earlier. Twelve-month revenue rose 15.2% to $356.5 million from $309.4 million.
PlayAGS shares rose 19 cents, or 2.11%, Tuesday to close at $9.20 on the New York Stock Exchange. The shares slipped after hours, dropping 3 cents, or 0.33%, to settle at $9.17.
